Soji-Eze Fagbemi looks at the plights of pensioners and why civil servants who retire under the Contributory Pension Scheme (CPS) cannot get their pension or any retirement benefit, until over a year after their retirement.
Rest, they say, is sweet after service. After years of labour, many look up with all excitement into retirement, hoping to have a fulfilling, peaceful and an old age devoid of suffering, having toiled day and night in their youthful days.
However, the situation of retirees in Nigeria, especially those from the core civil service is opposite, specifically since the commencement of the Contributory Pension Scheme in 2007. The pensioners, through the Nigeria Union of Pensioners (NUP), have often come out with the pathetic stories of their sufferings. They use every available opportunity to call the attention of the government to their plights but hardly would Nigerians know the gravity, and how the lives of many civil service pensioners degenerate after their retirement.
A retired civil servant, who simply identified himself as Samuel, painted this scenario. “I retired as a director in the federal civil service in July last year. Before my retirement, at least I received a regular monthly salary which was relatively enough for me to take care of myself and family and do some other things. I just told you I retired in July last year, 2019, and this is early August, 2020, which by my calculations is now over a year, but I can tell you, as we speak, I have not collected a dime as pension, even though I have my money, which I have contributed over the years in my Retirement Savings Account (RSA).
“For God’s sake, how do I cope? How do I survive? Even those who collect a regular salary are finding living difficult. How does the government I served for many years, for well over 30 years want me to eat, attend to my health at this old age and do what I should do before death finally comes. The government we served is driving and forcing many of us to our early grave.”
What are the reasons adduced for this development? Mr. Samuel said nothing to his knowledge besides the fact that the federal government has not paid its own part of the Contributory Pension Scheme (CPS), without which the pension regulatory agency- the National Pension Commission (PenComm) said, he, like others in the same position, cannot be paid.
However, the General Secretary of Nigeria Union of Pensioners (NUP), Elder Actor Zal and the Chairman, NUP Contributory Pension Sector (NUPCPS), Comrade Sylva Nwaiwu, told Nigerian Tribune that the problem began with the commencement of the implementation of the current scheme, and except President Muhammadu Buhari comes to the aid of the retirees, the problem, which has led to untimely death of many retired workers from the civil service will persist. In fact, they said many of the present retirees may not get their pensions till they die, if President Buhari does not address the problem for once, and pay the whole money required to offset and balance the total accrued pension right which has accumulated and dragged for years.
They called on President Buhari to intervene and do this urgently to save millions of retired pensioners, over the last one year from this ugly trend. According to the NUP, the total amount involved now is N85 billion, which the government is owing the pensioners. This covers a range of one year, which has always been in arrears.
Giving a detailed explanation of the problem, the NUP General Secretary, Elder Zal, said: “We want to appeal to the Federal Government to come to the aid of pensioners who retired under the Contributory Pension Scheme (CPS), because as we speak now, anybody that retires from June 2019 till date cannot access their pension. The reason being that the government is yet to pay up the balance of the accrued right to these pensioners and until that is done they cannot access their Retirement Savings Account (RSA). So, there are no two ways to it.
“The way at which we are going, the Federal Government is releasing the monthly pension of the contributory pensioners, the accrued right monthly. But the last release made about two weeks ago only covered May, 2019. If they release another one now, it will be for June 2019. So, all pensioners on that scheme that fell outside that will have to wait. Now, we are in August 2020. How do you retire and wait for one year before you access your own money that you contributed, simply because the government has not balanced up. That is why we are just appealing to the government to please balance it out so that it will be seen that the moment you retire, the following month you begin to enjoy your monthly pension.”
Elder Zal said the problem has been with us since the programme commenced in 2007. According to him, “the accrued right came about because when this scheme came up in 2007, some workers have already put in different years of service ranging from 10 to 15 years. Instead of the government allowing the scheme to commence with the people that start their service in that particular year, the government forced some people that were already in service to join the scheme.
“Those people were entitled to some compensation and retirement benefits for the previous years they have spent in service before the scheme kicked off. The government said they will calculate it, work it out and pay it into their account. But since that year, they did not pay until these set of people start retiring and it becomes a serious issue.”
The NUP General Secretary explained further: “What makes it very difficult for the retirees is that the Act establishing the contributory pension does not allow any pensioner to access his fund until all the relevant funds are domiciled in the Retirement Savings Account before they can do the calculation together. So, the fact is that these people have their money, which they had contributed in their accounts, but unless the government balanced it up with the accrued right, which is the money the government was owing them for the services they have rendered pre-2007 before the scheme started.”
While commending President Buhari for his efforts in settling this by releasing some funds to offset the pensions, he blamed the previous government from President Olusegun Obasanjo, Alhaji Umaru Musa Yar’Adua and Goodluck Jonathan for their failure to release money for the settlement of the pension.
He said: “It is very unfortunate that previous administrations did not give attention to this money. Even at a time, we had a problem because the National Assembly didn’t understand it. When PenCom calculates and sends the total accrued right to the National Assembly, they will cut it. If they calculate it and say the accrued right for one year is N67 billion, the National Assembly will just equate it with contract sum, bridges and roads construction, and they will just cut it to something in the range of N30 billion. How do you cut people’s money already calculated per head? It is like cutting the amount needed for salaries, you are cutting some people’s lives.
“So, all these problems aggravated but the present government has assisted us because before now, it was like five years. They have cleared it, it remains one year. So, we are only making an appeal that they should please, as a matter of urgency, save the lives of the people concerned, because if somebody retires now, in August 2020, he has to wait until August 2021 before he can get any payment. That is why we are making the appeal.”
He further explained that apart from the accrued right which is pre-2007 CPS entitlements, the government was not also fully remitting their own part of the contributory pensions, adding, “in some cases they were remitting it, in some cases, they were not forthcoming and the regulatory agency, PenComm cannot move against the government.”
He said, “it is just like the National Broadcasting Commission (NBC), who were by their actions, only out to regulate the private broadcasting stations. How can PenComm move against the Federal Government that they didn’t remit their own part? What we can do as a union is just to appeal to them so that these people can access their funds.”
Also, Comrade Sylva Nwaiwu, the chairman, NUP Contributory Pension Sector, said “we have N62 billion as outstanding accrued pension arrears up to December, 2019; while the budget appropriation for the current year, 2020, is N89 billion. We are yet to confirm the exact amount that has been released by the government so far in the current year.”
Comrade Nwaiwu appealed to President Buhari to bailout the sector just like he did in April 2017 when he released N54.6 billion to clear eight months of pension arrears in the Contributory Pension Scheme Sector. This, according to him, is to clear the remaining backlogs of pension accrued right to the retirees who retired between June 2019 and now.
“Once this is done, the agonies being experienced in the Contributory Pension Sector will become a thing of the past,” he said. He emphasised that the problems were only inherited by the present government from the administrations before it, hence, the pensioners applaud President Buhari for his interventions so far.
According to him: “Presently, President Buhari has stabilised budget appropriations for Contributory Pension retirees which before now were usually under-appropriated. He has also regularised monthly releases of pension accrued rights which got stuck since 2015. Nevertheless, the impact of his efforts are not yet felt in the sector because about 13 months accrued rights inherited from the previous regime would not allow PenCom to pay retirees benefits as and when due as long as the backlogs remain uncleared.
“For instance, accrued rights from January 2020 to June 2020 have been released by government but PenCom would not pay those who retired between January and June, 2020, when those who retired between January 2019 and June, 2019 are on the cue to be paid their benefits. This is the problem.
“We appeal to President Buhari to come to our aid with another bailout funds as he did in April, 2017, to clear the remaining backlogs of pension accrued right to the Contributory Pension Scheme retirees who retired between June 2019 and now. Once this is done, the agonies experienced in the CPS sector will become a thing of the past.”
However, the Head of Corporate Communications at PenCom, Mr. Peter Aghahowa, assured that the government was determined to settle the backlog to the retirees. He explained that PenCom was clearing the backlog of unpaid pensions as funds were released to it; and noted that PenCom has paid up to the month of May of 2019.
He, however, emphasized that only the Federal Government retired employees who were migrated from the old Defined Benefit Scheme are being owed. He added, “There is a backlog. Funds are being released by the Federal Government and payments are being made. When the Federal Government releases more funds, we will pay.”
However, other experts and stakeholders who spoke with Nigerian Tribune said it was inconceivable for a worker to retire after several years of service to the country and not get pension more than a year after his retirement. Though they faulted the previous administrations who had failed the loyal workers, they applauded President Buhari for his efforts so far in tackling the problem. However, the stakeholders appealed to the president and tasked him to urgently release all the accrued rights for the remaining one year.
The NUP President, Dr. Abel Afolayan, said the Federal Government had about two weeks ago released the sum of N7.45 billion from the outstanding accrued rights to pensioners. But he explained that
the amount is for the part payment of the outstanding accrued rights to pensioners up to May 2019. Dr. Afolayan, therefore, appealed to the Federal Government to release further funds to clear the backlog of the accrued rights from June 2019 to date. “Until a whole release for the remaining one year is made, workers who retired in the last one year will not have their pension paid,” he said.
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